Mining project proves controversial in Madagascar

An article in Sunday’s Observer detailed a conflict between a new mining operation and environmentalists in Madagascar. Rio Tinto, a large global mining firm, has recently received permission to go ahead on a $770 million ilmenite mining project in southwestern Madagascar. The mine could bring much needed income to Madagascar, which is among the world’s poorest countries.

Environmentalists fiercely oppose the mine saying it will adversely affect local people and result in the destruction of coastal rainforest, one of Madagascar’s most endangered ecosystems. There is also concern that the influx of foreign workers and the constriction of roads could result in higher HIV rates in the region. Currently Madagascar has unusually low rates of HIV infection for sub-Saharan Africa.

For its part, Rio Tinto claims it will be particularly sensitive to environmental concerns given the high biodiversity in the area and criticism it has received over the project. The firm plans to only work in 50 hectare blocks at a time and will reforest mined areas. Further, the company has set aside a block of land slated for mining as a conservation area to protect some of the native forest. The company is also working with Kew Gardens in London to preserve seeds from threatened plants.

Nevertheless critics of the mine argue there’s no way to fully replace a lost ecosystem. Friends of the Earth, an activist group particularly active in the area, has an especially strong reason to oppose the mine: eleven years ago one of their directors, Andrew Lees, died of heat stroke in the forest while investigating plans for the mine. Shortly after his death, his supporters established the The Andrew Lees Trust, an organization that works to “reduce poverty and improve natural resource management, food security, and health practices, especially HIV awareness, for rural communities in the south of Madagascar.”

This news item used information from The Observer and Andrew Lees Trust.

FURTHER INFORMATION ON MINING IN MADAGASCAR

Madagascar: Getting stoned

Jul 28th 2005 | ANTSIRABE

From The Economist print edition

Madagascar must try to reap more of a benefit from its plentiful gemstones

THESE days the vast swathes of brick dirt that gives Madagascar its nickname “the Red Island” are pockmarked by small holes: evidence of the search for sapphires, rubies and other precious stones. Mining accounts for 3% of the country’s GDP and 1% of its export revenues, and provides 500,000 seasonal and full-time jobs in a population of about 18m. But if the government improves the miners’ and cutters’ skills and curbs smuggling and corruption, the Malgaches would benefit a lot more.

Since the discovery of blue sapphires in 1998, boom towns have been springing up on the savannah, luring tens of thousands of miners, prospectors and dealers. But in many ways it is a classic African story of a resource-rich country—with the largest reserves of sapphires on earth—that remains one of the world’s poorest. Still, the World Bank hopes that, properly managed, the industry may yield more benefits to ordinary people than elsewhere in Africa, and perhaps bring in as much as $400m a year.

So the Bank and the government have set up the Mineral Resources Governance Project. It teaches diggers and small traders basic gemology and pricing and trains advanced students to become licensed cutters, so helping local Malgaches to get higher prices for their cut stones and compete against the Thais, who dominate the sapphire market. It may also reduce smuggling.

Until last February, a foreign gem trader had to get his business incorporated in Madagascar in order to export stones. Many traders and jewellers ignored this rule, sometimes sewing gems wrapped in plastic into their underwear to avoid scrutiny at customs. Others simply bribe customs officials. Now the government has abolished the need for in-country incorporation and has eliminated the export tax on cut stones, but will tax rough ones at 2% for export.

Excerpted from The Economist. The full article may be available at economist.com

Since then, Mr. Burke has switched sides. The 57-year-old former Friends of the Earth activist now works for Rio Tinto and is fielding complaints about another massive project: a proposed mine in Madagascar. The mine would extract 750,000 tons a year of ilmenite, a whitening agent used in paint and toothpaste, for the next 60 years. Mr. Burke champions the economic growth the mine would bring, but his former allies say it could destroy the subsistence lifestyle of largely illiterate villagers who live off the forest and ocean.

Mr. Burke is one of a handful of ex-activists who represent the companies they used to attack. These companies are grappling with the increasingly sophisticated tactics of activists. In Britain, for example, Friends of the Earth has urged insurance companies to join it in pressuring companies with environmentally risky practices. Companies say they hope people such as Mr. Burke can both build bridges with outside groups and stimulate reforms internally.

It’s tough work, although better-paying than manning the barricades. Longtime mining and energy executives are sometimes reluctant to listen to advice from ex-radicals. Those who remain in the movement often dismiss their old friends’ efforts as mere public relations, or “greenwash.”

Since Mr. Burke joined Rio Tinto in 1996, Friends of the Earth representatives say they see little substantive change in one of the world’s largest mining companies. “The quality of the conversation is better,” says Tony Juniper, current executive director of Friends of the Earth in England. “But massive market forces are driving these companies. They would much rather do a communications exercise than really change.”

Mr. Burke and others who have made a similar career jump contend that they remain committed to the environmental cause and have more impact working on the inside. On a visit in July to the area around the mine site in Madagascar, Mr. Burke toured coastal forests that have been stripped bare by villagers seeking wood to make charcoal. Rio Tinto’s mine may also do damage, he admitted, but the company plans to replace the vegetation it kills and help villagers develop new livelihoods that would save the forests from being denuded.

“I’m not going to listen to someone who says, ‘Go away until it can be done perfectly,’ ” Mr. Burke said at a nursery where Rio Tinto is experimenting with fast-growing trees it could plant after the mine excavations are completed.

Des Wilson, who ran Friends of the Earth in England during the 1980s, was one of the first activists to jump to a corporate job as head of public affairs at BAA PLC, the company that manages London’s airports and has been targeted by environmentalists. “There was never a question in my mind that the contribution I could make was far greater than standing outside in the street and waving a banner at them,” says Mr. Wilson, who retired in 2000.

In April 2004, Tricia Caswell, the former head of the Australian Conservation Foundation and a fierce opponent of the logging industry, became chief executive of the Victorian Association of Forest Industries, a leading Australian trade group. Ms. Caswell has told local media the industry is making progress and she wants to help promote sustainable logging.

The willingness to hire former activists reflects a growing trend among big industrial companies to deal with environmental groups rather than dismissing their concerns. Earlier this year Exxon Mobil Corp. agreed to hold regular meetings with Amnesty International to monitor the oil company’s human-rights performance. Amnesty had joined with the New York City Employees’ Retirement System, a major Exxon Mobil shareholder, to press for the meetings. And Home Depot Inc. has worked with environmentalists to ensure that the wood it imports from Chile, Indonesia and elsewhere is responsibly logged.

Rio Tinto was founded by English entrepreneurs in 1873 to mine copper in the Rio Tinto river in Spain. After a merger with an Australian company, it now has dual headquarters in London and Melbourne, with 2003 revenue of $11.8 billion. It mines iron, copper, diamonds and gold and other minerals in 40 countries around the world including a huge copper mine at Bingham Canyon, Utah.

In the 1980s Rio Tinto faced growing criticism about its environmental and social record. Some activist groups accused it of turning a blind eye when Indonesian military forces allegedly committed killings and sexual abuse as they evicted local people from the site of a Rio Tinto gold mine. The nadir came when tensions over a Rio Tinto copper mine in Papua New Guinea helped trigger a guerrilla war in the late 1980s between secessionists and the government. The two sides reached a truce in 1998.

Pressure to Change

By the mid-1990s, Robert Wilson, then Rio Tinto’s chief executive, was growing worried that protests around the world would make it harder for the company to secure mining permits. One environmental group, called Partizans, made fighting Rio Tinto its sole mission. “This is a company that 10 or 15 years ago was considered almost a pariah,” says Mr. Burke. “They were ready to make a change.”

Sir Robert asked Lord Richard Holme, then a Rio Tinto board member, to recruit an adviser on environmental issues. Lord Holme set up a meeting with Mr. Burke, by then one of the United Kingdom’s most prominent environmentalists. Mr. Burke was executive director of Friends of the Earth in England during the 1970s, then helped found the Green Alliance, an environmental lobby group, in the 1980s. In the 1990s, he worked as environmental adviser to several British governments.

Mr. Burke was receptive to the feelers from Rio Tinto. While helping organize a government committee including business leaders that was charged with developing environmental policies, Mr. Burke’s view of the corporate world had begun to change. He was struck by the pragmatism of the committee’s chairman, John Collins, then the chairman of Royal Dutch/Shell Group’s U.K. unit. Under Sir John, the committee proposed a tax increase on fuel to encourage the car industry to address global warming. The government soon enacted the boost.

When he met Sir Robert, Mr. Burke recalled that he had gotten his start protesting the proposed Rio Tinto mine in Wales. Mr. Burke said he understood that Rio Tinto felt it was working hard to protect the environment but there was still a gap between its self-image and the outside world’s perception. He sketched a graph to illustrate the gap.

“He’s a bit of a risk, but I like him,” Sir Robert told Lord Holme after the meeting, according to Lord Holme. (Sir Robert doesn’t recall the remark.) Mr. Burke joined the company — in the process doubling his salary, though he declines to provide specifics.

“Tom was meant to be the grit in the oyster who might occasionally make a pearl, even if he might be irritating other times,” says Lord Holme.

Mr. Burke, who had never seen a mine before, got off to a rocky start. Some managers viewed him as an annoyance, with plenty of big-picture ideas but little practical knowledge. David Richards, an executive in Rio Tinto’s health, safety and environmental department recalls hearing Mr. Burke lecture on the large loss of species across the planet. “I used to say, ‘Thanks for the speech, but how does that help me help the guy who has to deal with 20 hectares [50 acres] and a limited number of species that might not even be endangered?’ ” Mr. Richards says. Mr. Burke learned to follow up his talks with concrete proposals, and he connected Mr. Richards with an organization that specializes in small-scale conservation problems.

Mr. Burke also chafed at corporate bureaucracy. During long meetings, he caught up on reading or played computer card games. And some Rio Tinto managers groused they couldn’t get a word in edgewise when he argued his position. “It was easier for me to deal with the top decision-makers, but once I got beyond that layer, I must have been quite threatening,” Mr. Burke concedes. To foster good relations, Mr. Burke, a passionate ornithologist, brought managers on bird-watching trips near remote sites in Australia and Africa when traveling there for work.

Emissions Check

One of Mr. Burke’s most significant drives was to persuade Rio Tinto to tackle global warming by keeping its greenhouse-gas emissions in check. Over the course of a year, he traveled to Australia to win over local managers, many of whom were skeptical of the science behind global warming. He urged them to put the debate over the science aside, emphasizing instead that the risk of governmental regulation and negative publicity made it worthwhile to cut emissions. After quizzing Rio Tinto units how the cuts would affect their cost of doing business, he designed a flexible policy with different requirements for each location.

Rio Tinto adopted the policy in 2000. Last year, its goal was to cut overall emissions, but they increased 4.2% due in part to snafus at an aluminum smelter in Australia, Rio Tinto said. “A company like Rio Tinto is the paradigm of how difficult this issue is,” says Lord Holme. “It’s still something of a flashpoint for Tom.” A Rio Tinto spokeswoman says the company is confident it can meet its latest target, which says emissions per ton of product in 2008 should be 4% less than the 2003 level.

The toughest test yet for Mr. Burke is the Madagascar project. Rio Tinto plans to decide early next year whether to open the ilmenite mine on the southern coast near the town of Fort Dauphin. The company has spent 18 years planning for the mine and calculates that it could meet 5% to 10% of the world demand for the mineral. Rio Tinto would burn off the vegetation on a 10,000-acre site and use a four-story-high earth-removing machine to suck up 65 feet of sand and soil. It estimates that the mine and a neighboring port would cost $460 million.

In December 1994, Andrew Lees, then Friends of the Earth’s top campaigner, died from heatstroke near the site. Mr. Lees “went to investigate their project and died there,” says Mr. Juniper, the director of Friends of the Earth. “You don’t get higher stakes than that. We were determined to make sure he didn’t die in vain.”

Soon after hiring Mr. Burke, Rio Tinto asked him to organize meetings in Madagascar between company managers, environmental activists and local officials. On a five-day tour of the area in 1997, Mr. Burke and a colleague put together a list of local concerns: large inflows from the countryside of people looking for work could lead to increased prostitution and HIV infections, destruction of the forest could choke off hopes for an ecotourism industry, and port traffic could disrupt whale migrations.

Since then, Rio Tinto has modified its plans, moving the port to an unpopulated spot away from Fort Dauphin. It also changed the port specifications to allow for tourist vessels. It has brought in academics to catalogue flora and fauna in the area, producing a survey that even opponents recognize as the most extensive ever done in Madagascar.

But environmentalists are still steadfastly opposed to the project. On his recent visit to Fort Dauphin, Mr. Burke argued that Rio Tinto’s investment will produce jobs for local people and improve basic services such as roads. Activists respond that many of the people are illiterate and unqualified to work on a fairly high-tech project. They say that the Malagasy in the area, while poor, eke out a living by making charcoal from the forest and fishing. That could be endangered if chunks of the remaining forest are destroyed and the fishing stocks are depleted, they say.

Friends of the Earth wants Rio Tinto to post a bond to cover any eventual damage. It is pushing for British legislation that would allow local communities to sue for compensation in British courts. “If Tom Burke is 100% confident that this mine is only going to do good, he shouldn’t have any problem supporting this law,” says Craig Bennett, the activist leading the issue for Friends of the Earth. Rio Tinto declined to comment, but the mining industry is opposed to the proposal, saying it could open the door to a multitude of claims from around the world. The law hasn’t received serious consideration in Parliament.

On his Madagascar trip, Mr. Burke made a detour to visit a hillside memorial site for Mr. Lees, the late Friends of the Earth campaigner. The two had been friends. Mr. Burke photographed a plaque and reflected that if Mr. Lees were alive, “he would have been very difficult to engage.” He added, “The Andrew I knew would have picked up this ball and run it hard. … It would have taken him a long time to understand that there are people within Rio Tinto who are just as passionate about the environment as he was.”

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